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Content Is an Idiot King

You know the drill. Digital delivery is the future. Heck, it's already the present. The studios with thick vaults will thrive like kings. The popular video-sharing portals will live off the fat bandwidth of their lands.

However, the more you think about it, the more you see that the upper crust of digital video is more numskull than nobility. For instance:

CBS (NYSE: CBS) calls its video-streaming service Innertube. Unfortunately, Innertube.com is the website of a wholesale tire distributor.

Microsoft's (Nasdaq: MSFT) viral video website is called Soapbox. Soapbox.com is actually a Motley Fool domain name, originally used for our Soapbox community-research product and now a feeder into our Motley Fool CAPS stock-rating service.

Google's (Nasdaq: GOOG) YouTube was unceremoniously slapped down by the tube, pipe, and coil processing specialist that presides at Utube.com.

As far as visionaries go, these companies are starting to seem pretty nearsighted, no?

Throne, a curveSure, they're trying. CBS is serving up episodes of hit shows like CSI on Innertube, as well as pilots that never hit the airwaves, like The Papdits. Microsoft is trying to set itself apart from YouTube by shutting Soapbox down to new users for a few months until it has the safeguards in place to keep copyright-infringing content off the site. YouTube may have made some enemies along the way, but it's been striking up content-distribution deals with entities including BBC, the NBA, and even CBS.

So let's not write these folks off as lucky incompetents. They are sometimes aware of the thick opportunities. But how much respect can you have for them if they don't take the time to lock up the domain names behind their ventures?

Google may have inherited Utube's ire, but Google is the only one to blame for launching its third-party ad-syndication service as AdSense while a marketing consulting firm was toiling away as AdSense.com. Google eventually acquired the domain, but why brand an online service if you're not going to own the bulk of the type-in traffic?

The most notable culprit here has been Apple (Nasdaq: AAPL) . It went ahead with its iPhone cell-phone announcement, even as the iPhone trademark belonged to Cisco (Nasdaq: CSCO) and the iPhone.com domain belongs to a telephone service provider. It eventually made nice with Cisco. Then came the iTV device to beam iPod content into your living room. ITV.com is actually the home to the largest commercial television network in the United Kingdom. Apple caved in on that one. The home-theater contraption instead hit the market this month as Apple TV.

More than just flawed masters of their domainsPoor domain planning in branding isn't enough to sink the digital revolution. The prospects are too bright. The libraries are too deep. The consumer attraction is too obvious. But the brazen incompetence -- not to mention the cocky confidence -- could slow the revolution down, before it has a chance to show its margin-widening splendor.

Right now, you have networks -- and, to a lesser extent, motion-picture studios -- working hard to establish their own platforms. Everyone wants to be the home team. At the same time, Google's YouTube is starting to earn more and more disparaging looks. Viacom (NYSE: VIA) may be the first heavy to take legal action against the likes of "GooTube," but it's unlikely to be the last.

It isn't bad to sue when you've been wronged. YouTube has been sloppy. Content owners have had their intellectual capital stomped on. Yet isn't that more reason for the networks and studios to make the most of that stage time to get their own messages out? CBS and NBC are two of the more actively subscribed channels on YouTube. Those two networks are controlling the user experience. Yes, folks still upload pirated clips from CBS and NBC shows anyway, but the original versions by the networks are the ones drawing the crowds.

CBS and NBC are also going where the copyright infringer can't. Over the holidays, NBC's Saturday Night Live had another hit music video on its hands. Just as the show had enjoyed a sensation with "Lazy Sunday" a year earlier, "A Special Christmas Box" was a show favorite. Bootleg copies began popping up all over YouTube the next day. Did NBC panic? No. It cashed in by uploading the uncensored version of the lyrically randy spoof starring Justin Timberlake and Andy Samberg. The TV-copied versions suddenly seemed irrelevant. Closing in on 19 million views since December, it is the third most-viewed video of all time on YouTube.

CBS has also taken advantage of its position as the fourth most-subscribed channel in all of YouTube. More than just serving up ratings-popping segments from its late-night shows, CBS has been cashing in on its role as a broadcaster in sports. One of this past week's most subscribed-to channels was the CBS site covering the NCAA basketball tournament. If folks are going to be discussing the Final Four matchups this week, CBS wants the discussion to be on its virtual doorstep on YouTube.

So maybe there is still hope. A medium that is weighed on creativity will find a way to innovate intelligently in the era of digital video. There is more to gain than there is to lose at this point.

Longtime Fool contributor Rick Munarriz is a huge fan of Google, and it would be his homepage if it weren't for Fool.com taking up that piece of real estate. He does not own shares in any of the companies in this story. Rick is also part of theRule Breakersnewsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.

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Rick has been writing for Motley Fool since 1995 where he's a Consumer and Tech Stocks Specialist. Yes, that's a long time. He's been an analyst for Motley Fool Rule Breakers and a portfolio lead analyst for Motley Fool Supernova since each newsletter service's inception. He earned his BBA and MBA from the University of Miami, and he now lives a block from his alma mater.
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